Michael Burry shorts Tesla in options contracts worth $534 million

Famed investor Michael Burry one of the first investors to foresee call and profit from subprime mortgage crisis and even claimed a fortune on Gamestop, via a recent regulatory filing bets nearly a half a million dollars on Tesla puts.

Michael Burry is currently long puts 8,001 contracts equated to 800,100 shares of Tesla’s common stock.

Shares of tesla nearly fell 5% intraday.

Tesla had a turbulent 2021 with plunging sales in China during April and shortages of vehicle parts that halted production in the USA and China.

As more automakers produces batteries for their electric vehicles on their own, fewer will need to purchase Tesla’s environmental regulatory credit, which in the past they have done to become compliant with environmental regulations.

In the first quarter of 2021, its reported that Tesla did $518 million in sales of regulatory credits, which Tesla receives from government programs to support renewable energy.

Based on last years fourth quarter results, Tesla’s $270 million net income was accredited by the sale of its $401 million sales of regulatory credits.

Tesla gained around $1.6 billion in regulatory credits, allow Tesla to qualify for the S&P 500 Index.

Tesla is currently halting its upgraded models to their electric vehicle Model S and Model X and delayed it’s custom battery design “4680” for future Tesla electric vehicles.

Many investors believe that the tweets about Dogecoin and Bitcoin has an impact on Tesla’s stock price.

Tesla shares has dropped 20% in 2021 after a huge surge of 740% in 2020.